Last checked at 2 Feb 2011 07:00
DCC plc - Interim Management Statement
Very Strong Third Quarter Driving an Improved Full Year Outlook
DCC plc, the sales, marketing, distribution and business support services group listed on both the Irish and London stock exchanges, is issuing this Interim Management Statement in accordance with the reporting requirements of the Transparency Regulations 2007.
Quarter ended 31 December 2010
DCC achieved very strong revenue and operating profit growth, on both a reported and a constant currency basis, in its third quarter ended 31 December 2010.
With the exceptionally cold weather conditions throughout northern Europe, particularly in the last six weeks of the quarter, customer demand in DCC Energy, DCC's largest division, increased significantly. Volumes increased by 22%, approximately one third of which was organic, despite the logistical challenges created by poor road conditions and supply constraints. Trading in DCC SerCom, DCC's second largest division, was strong in its seasonally most significant quarter. There were good performances in its e-commerce, catalogue and supermarket retail channels, driven in part by the highly successful launch of Microsoft Kinect. In addition there was a first time contribution from Comtrade in France, the acquisition of which was announced in August 2010. There were good like for like performances in DCC Healthcare, where DCC Health & Beauty Solutions continues to perform strongly, and in DCC Food & Beverage, primarily due to continued tight cost management. The like for like trading performance in DCC Environmental was behind the prior year as the adverse weather impacted activity levels, particularly in the construction sector in Scotland.
Outlook for the year to 31 March 2011
Trading in January 2011 was satisfactory, although relative to the prior year it was impacted by the milder weather conditions compared to the extremely cold January 2010.
As a result of the Group's year to date trading performance, DCC's full year outlook has improved from that set out in the Interim Report dated 8 November 2010. The Group now expects an increase in operating profit for the year to 31 March 2011 of approximately 15% and an adjusted earnings per share increase of approximately 10%, both on a constant currency basis.
Therefore, on a reported basis, based on an average exchange rate for the year of Stg£0.8525 = €1 (compared to Stg£0.8600 = €1 at the time of the previous guidance dated 8 November 2010), the Group now expects an increase in operating profit of approximately 18% and an increase in adjusted earnings per share of approximately 13%.
Development expenditure
The Group has committed expenditure of €5.2 million on small bolt-on acquisitions since 30 September 2010.
The Group has incurred capital expenditure of €34.9 million in the quarter ended 31 December 2010, compared to €6.1 million in the same quarter in the prior year. Expenditure in the quarter includes a spend of €15.0 million on the purchase and fit out of the 250,000 square foot warehouse near Wellingborough, north of London, for DCC SerCom's UK Retail distribution operation. This investment allows Gem Distribution to market its third party logistics services to software and DVD publishers from a modern, customised facility within easy reach of the south east of England.
Preliminary Results
DCC expects to announce its preliminary results for the year to 31 March 2011 on Tuesday 10 May 2011.
For reference:
Tommy Breen, Chief Executive
Fergal O'Dwyer, Chief Financial Officer
Redmond McEvoy, Investor Relations Manager
Telephone: +353 1 2799400
Email: investorrelations@dcc.ie
Web: www.dcc.ie
Forward-looking statements
This announcement contains some forward-looking statements that represent DCC's expectations for its business, based on current expectations about future events, which by their nature involve risks and uncertainties. DCC believes that its expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve risk and uncertainty, which are in some cases beyond DCC's control, actual results or performance may differ materially from those expressed or implied by such forward-looking information.
About DCC plc
DCC plc is a sales, marketing, distribution and business support services group headquartered in Dublin, operating across five divisions - DCC Energy, DCC SerCom, DCC Healthcare, DCC Environmental and DCC Food & Beverage. In its last financial year ended 31 March 2010, DCC had sales of €6.7 billion and operating profit of €192.8 million and currently employs approximately 7,900 people. DCC's shares are listed on both the Irish and London stock exchanges under Support Services.